Prime Minister Tony Blair is to risk a backlash in Labour's traditional heartland by insisting a North-South divide in living standards is a myth.

Mr Blair will use a visit to the north west this week to highlight the findings of a new report which suggests that current view of a prosperous South and a poverty-stricken North is an over-simplification.

Blair: "Target needy individuals wherever they live"

The report compiled by the Cabinet Office, will show that the standard of living often varies sharply within regions as well as between different parts of the country.

Most regions have very poor areas blighted by joblessness, high crime and poor health but these often nestle next door to wealthy suburbs, it will suggest.

Mr Blair believes that the report will underline the importance of targeting government resources according to need rather than by crude, geography-based formulae.

The report, Sharing the Nation's Prosperity, will be published on Monday, and draws on data from various official sources and covers the whole of the UK.

Unemployment blackspots

It shows that some of the worst unemployment blackspots in England are actually on the south coast, in places such as Plymouth, Dover and Southend.

Likewise London, for all its prosperity, has five of the local authorities with the highest levels of unemployment in the country.

Half of the London boroughs (16) are among the top 50 most deprived local authorities.

And while Leeds is prospering, with gross domestic product per head rising to 109% of the EU average, just 30 miles south the South Yorkshire area has seen GDP plummet to barely 75% of the EU average.

Prosperous image of the South 'only partly true'

Mr Blair will cite the report in arguing that his government's policies are enhancing living standards around the country, and not just in already affluent areas.

The national minimum wage, for example, has had the biggest impact in the South West, in terms of the proportion of employees who have benefited.

And the largest number of recipients of the working families tax credit - designed to give poorer families a minimum income - are in the North West, with some 200,000 people benefiting.

The report will note that around the country there has been a net increase of 700,000 jobs since April 1997.

Long-term youth unemployment has fallen by at least half in every region over the last two years.

But Shadow Chancellor Francis Maude said Mr Blair was "flying absolutely in the face of reality" by denying a North-South divide.

The south east was over-heating while other areas were more reliant on manufacturing, which until recently had been in recession for most of a year, he told GMTV.

"I can see it's inconvenient for him because of his prating talk about the one nation, but the reality is we're getting a dangerously unbalanced economy
here," he said.